The property lease checklist addresses some of the most common issues that occur when a property lease is being negotiated. After reviewing it, you should be in good position to understand what to look for in any property lease agreement. Of course, before signing a property lease agreement, make sure that you review it.
• Nature and Duration of the Lease: Determine the term of the lease, and when the lessee is entitled to possession.
• Rent: In the contract, make sure that the amount of rent and when and how it is payable is stated.
• Lease Commencement Date: Please note that the agreement signing date and lease commencement date are different. Lease commencement is the date when your rent starts and you get the possession of the property.
• Escalation Clause: Since most leases contain a rent escalation clause, mention the exact amount of increase every year.
• Renewal: Is there an option to renew, and what is the term of each option? What is the rent for each renewal period? How must the option to renew be exercised?
• Taxes and Expenses: Determine who is responsible for the property taxes. If the lessee is agreeing to pay only for increases, is there a stated maximum? Who pays for society maintenance charges, parking? Who is responsible for extraordinary or structural repairs or alterations?
• Termination: Check the agreement termination clause carefully, is there any lock-in period, what if you want to terminate before the expiry of lock-in period (what is the penalty).
• Grace period: Are there grace periods for fit outs? What are the lengths of the grace periods?
• Enforcement: Are damages specified for breaches of various lease conditions?
• Use Restrictions: The nature of the tenant's prospective use of the premises may lead the landlord to impose limitations or guidelines. Check the agreement for the same.
• Improvements: The tenant may wish to add "improvements'' to the premises which might be of value to the tenant, but not future tenants. Determine the extent to which the landlord will allow improvements.
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